Monday’s Grain Whitewash Over? The Corn & Ethanol Report

We started off the day with Durable Goods Orders MoM (AUG), Durable Goods EX Transportation MoM (AUG), Durable Goods ex Defense MoM (AUG) at 7:30 A.M., Fed Williams Speech at 8:00 A.M., Baker Hughes Oil and Total Rig Count at 12:00 P.M., Cattle on Feed at 2:00 P.M. and another Fed Williams Speech at 2:10 P.M.

On the Corn front, Isis Almeida with Bloomberg reports the world’s largest commodity traders are making the most money in years exporting corn, soybeans, and wheat from American ports. China has been buying record amounts of U.S. corn and holding the biggest soybean-imports for the first time in three decades. There is a rush to guarantee loading space- at a time the Gulf Coast Terminal owned by Archer, Daniels, Midland Co. is offline sending margins soaring. Repairs to the terminal will not be completed until 2021, due to high waters from the active hurricane season. This will miss the key portion of the U.S. crop-cargo season, starting in the beginning of November and running through the end of January. It looks like The Phase-1 of the trade deal is beginning to bear fruit. “The big export sales of corn and soybeans on the books, of which half or more are to China, along with ADM’s export terminal closed for repairs until early 2021 have combined to push Gulf elevation margins to the highest levels in the last five years,” according to Thomas Meierotto, commodity risk manager at Chicago-based R.J. O’Brien & Associates LLC. In the overnight electronic session, the December corn is currently trading at 364 ½ which is 1 cent higher. The trading range has been 367 ½ to 363.

On the ethanol front, U.S. ethanol production hit a low not seen since late June. The IEA said production averaged 906,000 barrels a day, down 20,00 on the week, and 37,00 on the year. Uncertainty about blending demand and some elements of the federal renewable fuels policy continue to impact production. The domestic supply was reported at 19,997 million barrels, an increase from the previous week, but down 2.503 million barrels from last year because of a slowdown in production. The RFA said ethanol imports into the West Coast averaged 16,000 barrels a day, the seventh out of the last nine weeks with recorded imports. The next USDA corn for ethanol use estimate is out on October 9th. In the overnight electronic session, the October ethanol was quiet with 0 trades posted, settling at 1.310 and currently showing 2 bids @ 1.285 and 0 offers with Open Interest at 34 contracts. While the November ethanol is currently trading at 1.320 which is .030 higher. The trading range has been 1.320 to 1.300 with the market currently showing 2 bids @ 1.280 and 0 offers with 3 contracts traded and Open Interest at 39 contracts.

On the Crude Oil front, the market is back in chop mode, digesting each headline. There is still talk of demand levels will be challenged with pandemic lock-down fears that will reduce demand, while production cuts are mostly remaining the same or even or certain OPEC countries cutting more. In the overnight electronic session, the November crude oil is currently trading at 4006 which is 25 points lower. The trading range has been 4064 to 3975.

On the Natural Gas front, Will Robinson with Brownfield AG News for America reports a University of Missouri climatologist expects an early fall freeze. The climatologist Patrick Guinan expects temperatures to remain in the ’70s during September, but next week will struggle to reach 60 degrees. This should have natural gas producers salivating. In the overnight electronic session, the October natural gas is currently trading at 2.208 which is 4 cents lower. The trading range has been 2.247 to 2.152.

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